January 28, 2023

US Senate’s bill to reduce tariffs on products made in China

LQDFX blog: US Senate’s bill to reduce tariffs on products made in China

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Despite Trump’s administration recent threat for additional tariffs on $200bn Chinese products, the US Senate passed a bill in the opposite direction.

The White House has not yet commended on this move.The Senate passed the bill unanimously. The eliminated tariffs concern approximately 1,660 items and half of them are made in china. Nearly half of those items are produced in China.

Trump had previously announced in July that US will impose fresh tariffs if China “insists on going forward with the new tariffs”.

The escalating trade dispute between the United States and China has been keeping broader currency markets alert for a long time. Currency markets generally dislike intervention.

Washington and Beijing escalate trade conflict after several trade consultations. Although they decided to put trade war “on hold” in May, the two largest economies of the world finally did not manage to agree.

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FOREX – Currencies and commodities

In general Forex traders’ moves were tiny on Friday as they waited for second quarter US GDP data.

The dollar traded flat against its major traded rivals, ahead of US GPD data, although overnight it rallied 0.4%.

The Yen dropped 0.2% against the US dollar, although the Japanese currency was 0.4% higher for the week, ahead of BOJ next week’s rate review.

The Australian Dollar inched up 0.15%, retreating from drop in the previous trading session linked to drop in Chinese equites.

The Euro, after plunging more than 0.7% in the previous session following ECB’s policy meeting remained flat on Friday.

The Sterling dropped, moving towards a third consecutive week of losses. Although expectations about a rate hike by BoE next week are high, Brexit negotiations standstill obscures the traders’ appetite. The pound traded flat against the common currency.

Oil prices headed lower after three days of gains.

Gold prices edged down due to stronger dollar US and in response to easing trade tensions.

Sources: Reuters, CNN money, the guardian

PLEASE NOTE The information above is not investment advice.